Rule 701 is the most relied upon exemption from SEC registration that is applicable to many private issuers granting compensatory equity awards. As described in more detail in an article (found here) from two members of our compensation team (Matt Grunert and Emily Cabrera), Rule 701 will soon be revised to raise the enhanced disclosure threshold from $5mm to $10mm. This is welcomed news because complying with the enhanced disclosure requirement is burdensome (i.e., triggering the enhanced disclosure requires a private company to disclose detailed information about the risks associated with the potential investment, disclose balance sheets, and disclose income statements and other financial statements).
PartnerTony’s multi-disciplinary legal practice focuses on executive compensation, ESOPs and employee benefit arrangements (including their related tax, accounting, securities and corporate governance issues) in the United ...
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As has been widely reported, SEC Commissioner Hester Peirce (aka “Crypto Mom”) recently delivered a thoughtful speech entitled “Running on Empty: A Proposal to Fill the Gap Between Regulation and Decentralization,” including with it a model rule on digital token sales. The model rule has made waves in the crypto community because it proposes a three-year safe harbor from SEC registration while a development team builds out a functional, decentralized network.
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